Company Facts

History

We were formed in 2003 as a wholly owned subsidiary of Frontline, which is a major operator of large crude oil tankers. On May 28, 2004, Frontline announced the distribution of 25% of our common shares to its ordinary shareholders in a partial spin off, and our common shares commenced trading on the New York Stock Exchange, or the NYSE, under the ticker symbol "SFL" on June 17, 2004. Frontline subsequently made six further dividends of our shares to its shareholders and its ownership in our Company is now less than one per-cent.'

Pursuant to an agreement entered into in December 2003, we purchased from Frontline, effective January 2004, a fleet of 47 vessels, comprising 23 Very Large Crude Carriers, or VLCCs, including an option to acquire one VLCC, 16 Suezmax tankers and eight OBOs.

Transaction history

In March 2013, we sold the OBO Front Guider to an unrelated third party for total proceeds of approximately $20.9 million, including $11.87 million compensation from Frontline for early termination of the charter, which was received in December 2012. Following this disposal, we no longer owned any of the eight OBOs acquired from Frontline in 2004.

In March 2013, we took delivery of the newbuilding Handysize drybulk carrier Western Copenhagen, which immediately upon delivery from the shipyard commenced a three year time charter.

In February 2013, we sold the 1993 built Suezmax tanker Front Pride to an unrelated third party for total proceeds of approximately $12.1 million, including $2.1 million compensation from Frontline for early termination of the charter.

In January 2013, the non-double hull VLCC Edinburgh was delivered to its new owner. Net sales proceeds of approximately $18.8 million were received, net of $7.8 million compensation payable to Frontline for early termination of the charter.

In December 2012 we sold the OBO Front Viewer to an unrelated third party for total proceeds of approximately $20.9 million, including $11.4 million compensation from Frontline for early termination of the charter.

In November 2012, the single hull VLCC Front Lady was delivered to its new owner. Net sales proceeds of approximately $14.1 million were received, net of $12.2 million compensation payable to Frontline for early termination of the charter.

In November 2012 we sold the OBO Front Driver to an unrelated third party for total proceeds of approximately $9.6 million, including $0.5 million compensation from Frontline for early termination of the charter.

In November 2012, we took delivery of the newbuilding Handysize drybulk carrier Western Houston, which immediately upon delivery from the shipyard commenced a three year time charter.

In October 2012 we sold the OBO Front Climber to an unrelated third party for total proceeds of approximately $8.9 million, including $0.6 million compensation from Frontline for early termination of the charter.

In October 2012 we announced the acquisition of two 6,500 CEU car carriers Glovis Conductor and Glovis Composer, which were delivered in October 2012 and November 2012, respectively. Immediately upon delivery, they both commenced five year time

In July 2012 we sold the OBO Front Rider to an unrelated third party for total proceeds of approximately $10.2 million, including $0.4 million compensation from Frontline for early termination of the charter.

In April 2012, as compensation for the termination of long-term bareboat charter agreements with Horizon Lines, LLC relating to five container vessels, we received second lien notes in Horizon Lines, LLC with a face value of $40 million and warrants exercisable into ten percent of the common stock in its parent company Horizon Lines, Inc.

In March 2012, the single hull VLCC Front Duke was delivered to its new owner. Net sales proceeds of approximately $14.7 million were received, net of compensation payable to Frontline for early termination of the charter.

In March 2012, we took delivery of the newbuilding Handysize drybulk carrier SFL Kent, which is trading under a short-term time charter.

In February 2012, we took delivery of the newbuilding Handysize drybulk carrier Western Australia, which is trading under a short-term time charter.

In January 2012, we took delivery of the newbuilding Handysize drybulk carrier SFL Trent, which immediately upon delivery from the shipyard commenced a five year time charter.

In January 2012, we took delivery of the newbuilding Supramax drybulk carrier SFL Humber, which immediately upon delivery from the shipyard commenced a ten year time charter.

In December 2011, the Company agreed with Frontline to amend certain chartering agreements with Frontline. Ship Finance has agreed to temporarily reduce the charter rates by $6,500 per day per vessel from 2012 through 2015, and thereafter revert to previous charter rate levels. Frontline has paid a cash compensation of $106 million to Ship Finance. In addition there will be a cash sweep feature, whereby Ship Finance will receive 100% of vessel earning up to the old base rates. The old profit share arrangement has been improved from 20% to 25%, and will be calculated from the old threshold levels. Of the $106 million upfront payment, $50 million is a non-refundable, early payment of profit split for revenues above the old threshold levels. The cash sweep and the profit split will be payable on an annual basis, as before.

In October 2011, the Company sold the 1992-built combination carrier Front Striver.

In September 2011, the Company agreed to sell its three remaining single hull vessels to an unrelated third party for a total net sales price of approximately $72.7 million. Delivery to the new owner will be 1Q 2012, 4Q 2012 and 3Q 2013

In August 2011 and October 2011 we took delivery of the newbuilding Handysize drybulk carriers SFL Spey and SFL Medway, which immediately upon delivery from the shipyard commenced five year time charters.

In August 2011, we took delivery of the newbuilding Supramax drybulk carrier SFL Kate, which immediately upon delivery from the shipyard commenced a ten year time charter.

In June 2011, Seadrill exercised a pre-agreed purchase option for the jack-up drilling rig West Prospero. The purchase option price was $133.1 million.

In May 2011, we contracted four newbuilding 4,800 teu container vessels for delivery in 2013. The vessels have been chartered to Hamburg Süd for seven years from delivery

In April 2011, we agreed to sell the two 20-year old combination carriers, Front Breaker and Front Leader, to unrelated parties for a combined gross sales price of $21.8 million.

In March 2011, we announced that we have entered into an agreement, together with CMA CGM, the constructing shipyard and a financial institution, to acquire and charter-in two 2010-built 13,800 TEU container vessels in combination with 15-year time charters back to CMA CGM. Our investment is limited to $25 million per vessel, secured by junior mortgages.

In February 2011, we agreed to sell the two single-hull VLCCs, Front Highness and Front Ace, to unrelated parties for a combined gross sales price of $31.4 million. The vessels were delivered to their new owners in February 2011 and March 2011, respectively.

In February 2011, we took delivery of the newbuilding Supramax drybulk carrier SFL Sara, which immediately upon delivery from the shipyard commenced an eight year time charter. This vessel was the last to be delivered of the three newbuilding Supramax drybulk carriers which we agreed to acquire in August 2010.

In January 2011, we announced the acquisition of the 2007-built jack-up drilling rig Soehanah for an agreed purchase price of approximately $152 million. The rig was delivered in February 2011 and commenced a seven year bareboat charter back to the seller.

In December 2010, Golden Ocean Group Limited (“Golden Ocean”) exercised a purchase option for the 1997-built Panamax dry bulk carrier Golden Shadow in combination with a sale of the vessel to an unrelated third party. The sales price was approximately $21.5 million pursuant to an option agreement.

In August and November 2010 we acquired five Supramax dry bulk carriers in combination with long-term charters to Glovis, an investment-grade logistics company, at an average daily rate of $16,800 per vessel. Two vessels were delivered in 2010 and the remaining three is expected to be delivered from the shipyard in 2011.

In October 2010 we took delivery of the 1,700teu container vessel SFL Avon and chartered the vessel on a six month charter to a subsidiary of Maersk.

In October 2010 we secured five-year charters on four newbuilding Handysize drybulk carriers to Hong Xiang, a large privately-owned industrial conglomerate at a net daily rate of $14,000 per vessel.

In May 2010 we secured three-year charters on three newbuilding Handysize drybulk carriers to Western Bulk, an European-based operator, at a net daily rate of $12,900 per vessel. The vessels have a scheduled delivery in 2011 and 2012.

In April 2010, we sold the single hull VLCC Golden River to an unrelated third party for a total consideration of approximately $13 million

In March 2010 we took delivery of Everbright, the second newbuilding Suezmax tanker which we had agreed to purchase in November 2006. Immediately upon delivery from the shipyard, the Everbright was sold on hire-purchase terms and commenced a five year bareboat charter with annual purchase options during the charter period and a purchase obligation at the end of the charter in March 2015.

In February 2010 we agreed to terminate agreements made in June 2007 relating to the acquisition of four newbuilding containerships for an aggregate cost of approximately $155 million. Concurrently, we have agreed to acquire seven newbuilding Handysize drybulk carriers with delivery expected in 2011 and 2012, for an aggregate construction cost of approximately $188 million.

In February 2010 we sold the VLCC Front Vista to a subsidiary of Frontline for an aggregate amount of approximately $59 million.

In November 2009 we took delivery of Glorycrown, one of the two newbuilding Suezmax tankers, which we had agreed to purchase in November 2006. Immediately upon delivery from the shipyard, Glorycrown was sold on hire-purchase terms and commenced a five year bareboat charter with annual purchase options during the charter period and a purchase obligation at the end of the charter in November 2014.

In November 2009 the single-hull VLCC Front Vanadis was delivered to its charterer, an unrelated third party, pursuant to the exercise of a pre-agreed option for a total consideration of approximately $12 million.

In July 2009 the jack-up drilling rig West Ceres was delivered to a subsidiary of Seadrill pursuant to the exercise of a pre-agreed option for a total consideration of approximately $135 million.

In July 2009 we agreed to sell the single-hull VLCC Front Duchess to an unrelated third party for a total consideration of approximately $19 million. The vessel was delivered to its new owner in September 2009.

September 2008: Acquisition of two ultra-deepwater semi-submersible drillingrigs for a total cost of $1.7 billion. The rigs were delivered in November 2008, and commenced 15-year bareboat charters to Seadrill. The contracted cash flow is in excess of $2.3 billion.

July 2008: Sale of two Suezmax newbuildings for a gross sales price of $111mill. per vessel with an expected book profit of a total of $68 mill. The vessels will be delivered to the new owner after delivery from the yard in 2009/2010 and commenced 15-year bareboat charter to Seadrill.

May 2008, acquired the ultra deep-water drillship newbuilding from Seadrill. The vessel was delivered in June 2008.

March 2008, acquired two newbuilding chemical tankers from Bryggen Shipping and Trading AS. The first vessels was delivered in April 2008 and the second vessel was delivered in October 2008.

March 2008, re-chartered the single-hull VLCC Front Sabang to an unrelated third party. The new charter is in the form of a hire-purchase agreement, where the vessel is chartered to the buyer for a 3.5 year period, with a purchase obligation at the end of the charter.

December 2007, sold Sea Trout a platform supply vessel to Deep Sea Supply Plc (.Deep Sea.). The vessel was delivered in January 2008.

December 2007, sold two non-double hull Suezmax tankers. The vessels were delivered in December 2007 and January 2008.

November 2007, acquired two offshore support vessels from Deep Sea

August 2007, acquired five offshore support vessels from Deep Sea

July 2007, acquired the 1,700 TEU container vessel Montemar Europa. The vessel, built in 2003, was delivered to us in August 2007.

June 2007, acquired five newbuilding container vessels with scheduled delivery in 2010.

June 2007, acquired 10% of the equity of Seachange Maritime LLC, a Miami based company that owns and charters containerships.

May 2007, re-chartered the single-hull VLCC Front Vanadis to an unrelated third party. The new charter is in the form of a hire-purchase agreement, where the vessel is chartered to the buyer for a 3.5 year period, with a purchase obligation at the end of the charter.

March 2007, acquired three newbuilding seismic vessels, including complete seismic equipment, from SCAN Geophysical. The vessels are scheduled to be delivered in 2008.

February 2007, aquired two newbuilding Capesize vessels contracts from Golden Ocean. Delivery from the shipyard is scheduled in the fourth quarter of 2008 and first quarter of 2009.

January 2007, acquired a newbuilding jack-up drilling rig currently under construction from SeaDrill Invest II Ltd, a wholly owned subsidiary of Seadrill. The rig was delivered in June 2007.

January 2007, sold the single-hull Suezmax tanker Front Transporter. The vessel was delivered to its new owner in March 2007.

January 2007, sold a total of five single-hull Suezmax tankers to Frontline. The vessels were delivered to Frontline in March 2007.

December 2006, sold the VLCC Front Tobago to an unrelated third party.

November 2006, acquired two newbuilding Suezmax contracts from Frontline with delivery expected in the first quarter of 2009 and third quarter of 2009.

July 2006, acquired the Panamax dry bulk carrier Golden Shadow from Golden Ocean. The vessel was delivered to us in September 2006.

June 2006, acquired, the jack-up drilling rig West Ceres from SeaDrill Invest I Ltd, a wholly owned subsidiary of Seadrill.

April 2006, acquired five 2,824 TEU container vessels built at Hyundai Mipo yard in Korea from Horizon Lines. Under this agreement the Horizon Hunter was delivered in November 2006, the Horizon Hawk in March 2007, Horizon Eagle and Horizon Falcon in April 2007 and the final vessel, Horizon Tiger in May 2007.

January 2006, acquired the VLCC Front Tobago from Frontline.

November 2005, the bareboat charterer of the VLCC Navix Astral exercised an option to purchase the vessel. The vessel was delivered to its new owner in January 2006.

August 2005, sold a Suezmax tanker, the Front Hunter to an unrelated third party.

June 2005, acquired two vessel owning companies, each owning one 2004 built VLCC from parties affiliated with Hemen.

May 2005, acquired two vessel owning companies, each owning one 2005 built containership, Sea Alfa and Sea Beta, from parties affiliated with Hemen.

May 2005, acquired three Suezmax tankers from Frontline, the Front Traveller, Front Transporter, and Front Target.

May 2005, sold the three Suezmax tankers, Front Lillo, Front Emperor and Front Spirit. These vessels were delivered to their new owners in June 2005.

January 2005, sold a Suezmax tanker, the Front Fighter, to an unrelated third party. The vessel was delivered to its new owner in March 2005.

January 2005, we exercised the option to acquire the VLCC Oscilla

January to March 2005, acquired three additional double hull VLCCs from Frontline.